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14/11/2017

Legal landscape: What's the point of assets of community value?

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Assets of Community Value offer little value to communities, landowners or developers, argues Hayley Gore. Without a right of first refusal, landowners can simply ignore local groups’ bids

Five years on from the introduction of the Assets of Community Value regime, it is apparent that the designation fails to provide any real community benefit. In fact, it only delays and annoys developers.

In balancing the rights of landowners against the aim of achieving “significant community benefit”, the coalition government admitted that the right being created for local groups was merely to “identify” assets of importance to their community, and give them time to bid on assets if they are on the market. 

A 2015 DCLG committee report stated that from 122 instances when the moratorium period was triggered, community groups had bought only 11 assets. Nevertheless, ACVs are popular – 4,000 have been listed.

To be listed, the property must be nominated by a local group. It must have been in recent use for a purpose that furthers community well-being, with a realistic prospect of such a use continuing. 

By setting the bar for listing so low, the process often gives local groups the illusion that they can impact on the future of an asset. 

"It is largely toothless in terms of giving real rights to local groups and results only in delays for landowners seeking the best deal"

Unlike equivalent Scottish provisions, the English process creates no right of first refusal if the asset comes up for sale. In fact, a listing does not provide a means for the local group to force the landowner to negotiate with them, or even to consider their offer.

Even if the moratorium gives the local group time to raise funds to bid, owners of an ACV are often looking to sell for development, rather than current use, value. In such circumstances local groups often cannot make a competitive offer. There is no restriction on to whom the asset may be sold after the moratorium period expires, or at what price. The only real impact of the ACV regime, therefore, is to temporarily frustrate developers by causing delay, without providing any obvious benefits for local communities.

Cold comfort for residents

A listing does not even have to be taken into account as a material consideration by a local planning authority when determining a planning application. Even if a property is listed, permission can be granted for a change of use. Some bite was given to the status of ACVs when permitted development rights for change of use or demolition of pubs were limited in 2015, but permission can still be granted by a LPA for such changes of use. Further, any local group can bid during the moratorium period – cold comfort to a local group that has expended a great deal of time and energy – and probably money – in applying to the LPA to make the listing.

With a few notable exceptions, listing an asset as an ACV does not provide the community with any real control over the property’s use, sale, or price. It is largely toothless in terms of giving real rights to local groups – as it must be to avoid taking too many rights from landowners – and results only in delays for landowners seeking to get the best deal for their land. 

All the ACV regime provides is for local groups is an extra six months to raise funds and convince a landowner to sell to them.

Unless the six months are business-critical to the seller, or the local group raises enough money to make a truly competitive offer in that time, the group is in no better position than it would be without the ACV listing. It is a right to bid, not a right to be considered and they have always had that right if property comes to market.  

If the concern of a local group is to avoid certain sites being redeveloped for residential or other uses, they may find their time better spent influencing the drafting of neighbourhood plans which, unlike an ACV listing must be given weight when considering planning decisions.  

Hayley Gore is an associate in the planning and infrastructure consenting team at Eversheds Sutherland (International) LLP

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